Lyddy Supports Opening State Health Plan

To Towns, Small Businesses

By John Voket

A measure that received unwavering support from Newtown’s State Representative Christopher Lyddy passed a legislative vote May 20, aiming to open the state employee and retiree health insurance plan to municipalities, small businesses, and nonprofit agencies. Other supporters of the change, led by Democratic House Speaker Christopher Donovan, said pooling everyone will save money because of the greater bargaining power and the ability to spread out more of the risk.

“This partnership will help municipalities retool their budgets,” Rep Lyddy told The Newtown Bee Thursday morning. “Some towns will definitely see some savings, while for others it will be neutral, but this would be voluntary participation.”

Rep Lyddy said the move toward pooling small companies and towns with the state health care plane is “changing way to do business.”

“This is a step in right direction, supporting small bus and municipalities in an area where costs have skyrocketed in recent years,” Rep Lyddy said.

Even though the governor already vetoed a similar bill last year, Rep Lyddy is hopeful that with the overwhelming support from the house — albeit along party lines — “now is the time to support this,” Rep Lyddy said. “I’m confident the governor will do the right thing.”

Rep Lyddy said Newtown Finance Director Robert Tait and school district Business Manager Ronald Bienkowski worked with his staff to determine how the move could help local taxpayers.

“We’re crunching numbers now and they look good for likely taxpayer savings here in Newtown,” Rep Lyddy said.

During deliberation, lawmakers said Wednesday at least 24 states, including neighboring Massachusetts and New York, allow cities and towns to join their state insurance plans. But if this legislation becomes law, Connecticut would be the first to also allow nonprofits and small businesses with 50 or fewer employees.

“I would argue that this is the time that Connecticut needs to act on the largest issue that’s facing the country,” said House Majority Leader Denise Merrill, D-Mansfield. “There is national attention being paid to this, but we cannot sit by. We need to make progress on this issue.”

The House of Representatives passed the bill on a mostly partisan 109-36 vote following a seven-hour debate, one of the longest of this year’s legislative session. The bill now moves to the Senate, which also is controlled by Democrats.

But even if the bill passes there, its survival is doubtful. Governor M. Jodi Rell, a Republican, vetoed a similar bill last year.

Meanwhile, lawmakers were considering a second bill that creates a new public authority charged with developing a self-insured health care plan that would extend insurance coverage to the state’s uninsured. The plan would be presented to the General Assembly in 2011.

The Universal Health Care Foundation of Connecticut, an independent nonprofit that promotes universal access to health care, estimates that of the state’s 3.5 million residents, 356,000 are uninsured.

Opponents of the health care pooling bill, mostly Republicans, claimed that the legislation is financially dangerous for the state, especially at a time when it faces a nearly $10 billion budget deficit over three fiscal years.

This year’s version of the bill also would convert the state’s employee and retiree insurance plan, which serves about 200,000 people, into a self-insured plan. Republican lawmakers questioned whether the state, and not a private insurance company, should be taking on that new risk.

“This is on the verge of irresponsible,” said Representative John Harkins, R-Stratford, citing projections from Gov Rell’s budget office that the new self-insured system could cost the state $69 million in fiscal year 2010.

Representiative Steve Fontana, D-North Haven, co-chairman of the General Assembly’s insurance committee, disagreed with that cost estimate. He claimed the bill would save about $70 million initially and $10 million to $20 million annually in future years.

He said the state would save money in premium and administrative costs it now pays private health insurance companies. Connecticut’s health care plan used to be self-insured until the late 1990s.

Associated Press content was used in this report.